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ZTO Express (ZTO) Misses Q4 Earnings Estimates, Shares Fall

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ZTO Express’ (ZTO - Free Report) fourth-quarter 2020 earnings of 24 cents per share missed the Zacks Consensus Estimate by a penny. Moreover, the bottom line declined significantly year over year due to 20.1% decrease in parcel unit price as a result of intense competition. This earnings miss and its year-over-year decline, despite significant rise in parcel volume, might have weighed on investor sentiments, causing shares of the company to slip 4% in after-hours trading on Mar 17.

Total revenues of $1,265.5 million (RMB 8,257.1 million) increased in double digits year over year, owing to significant rise in revenues at the core express delivery services unit (accounted for 86.9% of the top line).

Detailed Operational Statistics

Revenues in Express delivery services surged 17.1% year over year due to 46.5% jump in parcel volume. Parcel volume market share increased by 1.3 percentage points to 20.4%. Freight forwarding services revenues augmented 92.1% year over year, owing to increase in cross-border e-commerce demand amid coronavirus concerns. Also, revenues from sale of accessories increased 7.9% year over year due to higher usage of lower-priced single-sheet digital waybill since the second half of 2019.

Meanwhile, total operating expenses of this China-based company climbed 56.5% to RMB 291.71 million. Selling, general and administrative expenses rose 6.5% year over year, with increases in salaries and accrued bonuses. Gross margin deteriorated to 22.5% in the fourth quarter from 29.2% in the year-ago quarter. As of Dec 31, 2020, ZTO Express repurchased 14.5 million ADSs at an average price of $22.2.

ZTO Express anticipates parcel volumes in the range of 22.95 billion-23.80 billion for 2021, indicating a 35-40% year-over-year surge.

ZTO Express Cayman Inc. Price, Consensus and EPS Surprise

 

ZTO Express Cayman Inc. Price, Consensus and EPS Surprise

ZTO Express Cayman Inc. price-consensus-eps-surprise-chart | ZTO Express Cayman Inc. Quote

Liquidity

ZTO Express, carrying a Zacks Rank #4 (Sell), exited the fourth quarter with cash and cash equivalents of RMB 14.21 billion compared with   RMB 5.27 billion at the end of 2019.

Special Dividend

ZTO Express’ board approved a special dividend of 25 cents per share, which is expected to be paid on Apr 20, 2021 to holders of class A ordinary shares and on Apr 22, 2021 to holders of ADSs, of record as of Apr 8, 2021.

Sectorial Snapshot

Let’s take a look into some other Zacks Transportation sector companies’ fourth-quarter results.

Expeditors International of Washington (EXPD - Free Report) , carrying a Zacks Rank #3 (Hold), reported fourth-quarter 2020 earnings of $1.16 per share, beating the Zacks Consensus Estimate of $1.04. Additionally, total revenues of $3,169.2 million outperformed the Zacks Consensus Estimate of $2,397 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Trinity Industries (TRN - Free Report) , carrying a Zacks Rank #4, reported fourth-quarter 2020 earnings (excluding $1.17 from non-recurring items) of 4 cents per share, which missed the Zacks Consensus Estimate by a penny. However, total revenues of $415.6 million surpassed the Zacks Consensus Estimate of $299.7 million.

Azul (AZUL - Free Report) , carrying a Zacks Rank #4, incurred a loss (adjusted) of $1.49 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of 80 cents. Meanwhile, total revenues of $331 million outperformed the Zacks Consensus Estimate of $313 million.

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